§ 3-46. Sanctions for breach of financial agreements (finansavtaler)

The Financial Contracts Act (Finansavtaleloven)·LOV-2020-12-18-146

Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська

In brief

A breach of § 3-1 first paragraph gives a right to cancellation of the contract (heving) and compensation (erstatning), except for circumstances the service provider (tjenesteyter) is not responsible for.
A breach of the duty to provide information only counts if it has affected the agreement.
The service provider cannot use a breach of another agreement as grounds for cancellation of the contract or for making a claim fall due.
Other claims under general rules still apply.

The text of the law (unofficial translation)

§ 3-46. Sanctions for breach

(1) If the service provider has breached obligations under § 3-1 first paragraph, the agreement may be cancelled under the rules in § 3-48, and compensation may be claimed under § 3-49. However, this does not apply to breaches of duty caused by circumstances on the part of the customer (kunde) or other circumstances for which the service provider is not responsible.

(2) In the event of a breach of the service provider's duty to provide information, the first sentence of the first paragraph applies only if it must be assumed that the breach has had an effect on the agreement. Nor may the customer claim as a breach of the duty to provide information anything that the customer knew or must have known about when the agreement was entered into.

(3) If, before the agreement was entered into, the customer was made aware of the main characteristics of the service and then, without reasonable grounds, fails to follow a request from the service provider to familiarise themselves with information the customer receives from the service provider, the customer cannot claim as a breach anything that they should have become aware of by following the request. However, this applies only if the service provider has given the information in accordance with the requirements that follow from law or regulations (forskrift) or from the agreement.

(4) If the customer has breached the agreement, the service provider may cancel the agreement on the conditions that follow from § 3-51. The service provider cannot, in relation to the customer, stipulate a right to cancel or terminate the agreement or to treat a monetary claim under the agreement as due because the customer has breached another agreement or another monetary claim.

(5) This section does not limit legal claims the parties to the agreement may assert under otherwise applicable rules. Nor does the section limit the service provider's duty to make corrections or take other measures to fulfil its obligations under § 3-1.

Source: Lovdata — Finansavtaleloven (the Financial Contracts Act) § 3-46

What does this mean?

This section says what the customer can do when the service provider breaches its obligations, and what the service provider can do when the customer is in breach. A breach of the general duty of care in § 3-1 first paragraph can give the customer the right to cancel the agreement under § 3-48 and claim compensation under § 3-49. The exception is breaches caused by the customer themselves or by circumstances the service provider is not responsible for. § 3-1 first paragraph requires, among other things, that the service provider acts honestly, fairly, professionally and with due care.

For breaches of the duty to provide information, the threshold is higher. A sanction applies only if the breach must be assumed to have affected the agreement. Nor can the customer rely on shortcomings in information that the customer knew about, or should have known about, when the agreement was entered into. If the customer has been told the main characteristics of the service and, without good reason, ignores a request to read up on information, the customer cannot later complain about what following the request would have revealed. This requires that the service provider gave the information as the law or the agreement requires.

The service provider can cancel the contract when the customer is in breach, on the conditions in § 3-51. However, the law blocks so-called cross-default: the service provider cannot agree on a right to cancel or terminate, or to treat a monetary claim as due, because the customer has breached another agreement or another claim. An example using the law's roles: a customer has failed to pay another monetary claim. The service provider cannot use that as grounds to cancel an entirely different agreement with the customer.

This section does not remove other claims the parties have under general rules. The service provider must still correct errors and take other measures to fulfil its obligations under § 3-1. The customer's right to cancel the contract is regulated in more detail in § 3-48, compensation in § 3-49, notice of complaint (reklamasjon) in § 3-47 and exemption from liability in extraordinary circumstances in § 3-50.

Related sections

All sections of the Financial Contracts Act →